US Treasury Secretary Scott Bessent has unveiled a new phase of Washington’s economic campaign against Iran, this time aimed not only at sanctioned Iranian institutions but at the international networks Tehran has used to keep money and goods moving.
Speaking on August 24, Bessent said the United States would target what he called five economic lifelines: digital assets, technology, gold, aviation and shipping. He also warned foreign entities that help the country illicitly move money around.
“Any entity that facilitates money laundering for Iran will be removed from the US dollar-based financial system,” Bessent said. “The countdown starts now.”
The approach represents an effort to tighten secondary sanctions, putting pressure on companies, financial intermediaries and trading partners outside Iran rather than simply adding restrictions on an economy already heavily sanctioned.
The US announced measures against around 60 individuals, entities and vessels. But it stopped short of targeting major Chinese banks, highlighting the limits of how far the US may be willing to push enforcement against Iran’s biggest remaining trading partner.
How Iran has been evading US sanctions
For years, Iran has relied on networks outside the formal banking system to move money.
Exchange houses, gold, cryptocurrency, front companies and opaque shipping networks have helped Iran bypass sanctions.
The latest US strategy appears designed to make those methods more difficult by increasing the cost for foreign intermediaries and comes at a vulnerable moment for Iran.
Oil exports have fallen sharply amid US efforts to disrupt Iranian oil shipments. Shipments to China, Iran’s main oil customer, dropped to about 534,000 barrels per day in August from 823,000 in July and from a peak of around 1.58 million barrels earlier this year.
At home, food prices rose around 128% year on year in July, according to official data cited by Reuters news agency.
Iran’s currency has lost so much value that many transactions, including property and car sales, are now conducted in US dollars. Advertisements are sometimes even priced in dollars.
Rising inflation hits Iranian businesses
The pressure is increasingly visible in ordinary businesses.
A building materials seller in the capital, Tehran, told DW that inflation has become so severe that simply holding goods can sometimes be more profitable than selling them.
“If I keep something in my warehouse for a month, its price may rise by more than the profit I would make by selling it today,” he said.
He also owns a stone-cutting business and said fulfilling older contracts has become increasingly painful because replacement materials may cost considerably more a few weeks later. And raising prices offers no easy solution.
“If I increase the price beyond a certain point, nobody can afford to buy it,” he said.
The restrictions also disrupt how private companies pay suppliers, import raw materials and maintain employment.
Another Iranian who works at a trading company told DW that more than 70% of its employees had been laid off during the past six months.
The company imported raw materials for various personal products and previously transferred payments through exchange houses in the United Arab Emirates.
“Now no exchange house is willing to work with us,” the employee said.
How sanctions affect Iranian businesses abroad
The effects are also spreading to Iranian businesspeople outside the country.
An Iranian businessman who moved to Dubai told DW that he had previously owned several cosmetics and hygiene brands in Iran. Restrictions on imports and difficulties obtaining raw materials eventually pushed him to relocate.
In Dubai things were more manageable. But since the war, that has changed, he said.
“These days, having an Iranian passport makes almost every transaction more difficult,” he told DW.
He said Iranian entrepreneurs are increasingly uncertain whether banks will maintain their accounts or whether residency rules could be tightened.
“In an environment where there is no stability and the outlook is unclear, you cannot really run a business,” he said.
Can more sanctions change Tehran’s behavior?
Alireza Salavati, a London-based political economy commentator, is skeptical that the new US measures will produce a fundamental strategic shift.
Iran is already sanctioned across most major sectors, he told DW. Further restrictions may involve expanding enforcement of existing networks rather than creating entirely new forms of economic pressure.
“Their principal effects are likely to be psychological, intensifying inflationary expectations,” Salavati said.
Salavati also warns that economic pressure could weaken the remaining middle-income and professional groups that traditionally provide space for more moderate politics.
Rather than producing rapid political change, he believes the pressure could deepen polarization and encourage the state to reduce already limited subsidies and social assistance.
Could US sanctions strengthen Iran’s shadow economy?
There is another paradox. The more Washington restricts formal financial channels, the stronger the incentive becomes to develop informal ones.
Iran’s sanctions economy has already created complex networks of intermediaries, cryptocurrency transfers, front companies, cash transactions and unofficial currency markets.
Closing one route may make transactions more expensive without necessarily stopping them.
“The broader consequence is likely to be corrosive rather than transformative,” Salavati said, warning that the result could be an even larger and less controlled underground economy.
The new sanctions may make it harder for Tehran to finance trade, obtain foreign currency and sustain its existing economic networks. But the immediate burden is falling on companies, workers and households already dealing with wartime disruption and extreme inflation.
Whether US pressure changes the behavior of Iran’s leadership remains uncertain.
Edited by: Tim Rooks
